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Title 46 — ShippingRelease 119-73

§53721 Rights of obligee

Title 46 › Subtitle Subtitle V— - Merchant Marine › Part Part C— - Financial Assistance Programs › Chapter CHAPTER 537— - LOANS AND GUARANTEES › Subchapter SUBCHAPTER II— - DEFAULT PROVISIONS › § 53721

Last updated Apr 6, 2026|Official source

Summary

If a borrower is more than 30 days late paying principal or interest on a loan guaranteed under this law, the lender or its agent can ask the Secretary or Administrator to pay the unpaid principal and any interest that has accumulated up to the payment date. The lender must make that request within the time the guarantee allows or within 90 days after the default, whichever is sooner. After the request, the Secretary or Administrator must pay the unpaid principal and accrued interest within the time the guarantee allows or within 30 days of the request, whichever is sooner. The Secretary or Administrator does not have to pay if, before the deadline, they find the borrower was not in default or the borrower fixed the default before the request. The lender cannot make the request if, before the request, the Secretary or Administrator has already taken over the borrower's rights and duties and paid the defaulted amounts. The loan’s guarantee still stays in effect after that takeover.

Full Legal Text

Title 46, §53721

Shipping — Source: USLM XML via OLRC

(a)Except as provided in subsection (c), if an obligor has continued in default for 30 days in the payment of principal or interest on an obligation guaranteed under this chapter, the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. The demand must be made within the earlier of—
(1)a period that may be specified in the guarantee or a related agreement; or
(2)90 days from the date of the default.
(b)(1)If a demand is made under subsection (a), the Secretary or Administrator shall pay to the obligee or the obligee’s agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—
(A)a period that may be specified in the guarantee or a related agreement; or
(B)30 days from the date of the demand.
(2)The Secretary or Administrator is not required to make payment under this subsection if, within the appropriate period under paragraph (1), the Secretary or Administrator finds that the obligor was not in default or that the default was remedied before the demand.
(c)An obligee or the obligee’s agent may not demand payment under this section if the Secretary or Administrator, before the demand and on terms that may be provided in the obligation or a related agreement, has assumed the obligor’s rights and duties under the obligation and any related agreement and made any payment in default. However, the guarantee of the obligation remains in effect after the Secretary’s or Administrator’s assumption.

Legislative History

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 53721(a)46 App.:1275(a) (1st sentence less parenthetical).June 29, 1936, ch. 858, title XI, § 1105(a), as added June 23, 1938, ch. 600, § 46, 52 Stat. 971; Aug. 15, 1953, ch. 513, § 3, 67 Stat. 626; Sept. 3, 1954, ch. 1265, § 5, 68 Stat. 1272; Aug. 7, 1956, ch. 1026, § 1(e)–(g), 70 Stat. 1087; Pub. L. 85–520, July 15, 1958, 72 Stat. 358; Pub. L. 91–469, § 33, Oct. 21, 1970, 84 Stat. 1035; restated Pub. L. 92–507, § 3, Oct. 19, 1972, 86 Stat. 914; Pub. L. 97–31, § 12(136), Aug. 6, 1981, 95 Stat. 166; Pub. L. 98–595, § 1(8), Oct. 30, 1984, 98 Stat. 3131. 53721(b)(1)46 App.:1275(a) (last sentence less proviso). 53721(b)(2)46 App.:1275(a) (last sentence proviso). 53721(c)46 App.:1273(e) (last sentence).June 29, 1936, ch. 858, title XI, § 1103(e) (last sentence), as added Pub. L. 98–595, § 1(1), Oct. 30, 1984, 98 Stat. 3130. 46 App.:1275(a) (1st sentence parenthetical).

Editorial Notes

Amendments

2008—Pub. L. 110–181, § 3522(b), repealed Pub. L. 109–163, § 3507(a)(1)(C), (F). See 2006 Amendment note below. Pub. L. 110–181, § 3522(a)(10)(B), (11), incorporated the substance of the amendment by Pub. L. 109–163, § 3507(a)(1)(C), (F), into this section by inserting “or Administrator” after “Secretary” wherever appearing and “or Administrator’s” after “Secretary’s” in subsec. (c). See 2006 Amendment note below and section 18(a) of Pub. L. 109–304, set out as a Legislative Purpose and

Construction

note preceding section 101 of this title. 2006—Pub. L. 109–163, § 3507(a)(1)(C), (F), which directed the amendment of section 1273(e) and 1275(a) of the former Appendix to this title from which this section was derived, was repealed by Pub. L. 110–181, § 3522(b). See 2008 Amendment notes and

Historical and Revision Notes

above.

Reference

Citations & Metadata

Citation

46 U.S.C. § 53721

Title 46 — Shipping

Last Updated

Apr 6, 2026

Release point: 119-73